04/27 - Dow fails at key Fib

The Dow Jones Industrial Average has likely put in an intermediate top. Monday's failure at a key Fibonacci retracement at 11245 (61.8% of the 2007 high to the 2009 low) managed to form a doji candlestick, which indicates indecisiveness at an overbought juncture. The Dow now looks to have completed a 5 of a 5 (Elliot Wave), which suggests a pullback to the previous 4th wave base located just below 11,000. Also, volatility has picked up according to the VIX and the US Dollar Index remains strong. In the event that EUR/USD breaks solidily below a 3-month RSI uptrend, look for extended Dollar strength towards the 1.28 level (EUR/USD).

04/15 - Dow Jones in a 5 of a 5

The Dow Jones Industrial Average (and S&P 500) is forming the fifth wave within a five-wave up-move off the March 2009 low. According to Elliot Wave International, bullish sentiment has reached an extreme with roughly 92% of participants bullish on equities. Bearish MACD & RSI divergence is evident on hourly, daily & weekly charts, which indicates that there is only a small margin for error for stocks. I anticipate the formation of either a rising wedge or a blow-off top. In the event of a bullish exhaustion, a key Fibonacci level at 11250 could be tested (the 61.8% retracement of the entire bear market decline). Moreover, the VIX is exhibiting bullish MACD divergence, which hints of false-break of the 16 threshold and more importantly a pickup in volatility.

04/07 - 5 REASONS EQUITIES SHOULD STALL/CORRECT

1. The Dow Jones Industrial Average just confirmed a 2-day double top (Monday/Tuesday's highs) and negative diverging daily oscillators should continue to weigh. Losing 9-day MA support near 10900 suggests a broader correction is in play.

2. The VIX is pausing at a familiar level near the 16 handle and could potentially mark a double bottom base. Above the resistant 30-day MA confirms a base in volatility.

3. Treasury yields (which tend to reverse trends before stocks) have shown a failure at a key psychological level, namely the 10-year yield at 4.00%.

4. The 2010 sector leader (XLY) is losing leadership (to XLE) according to a relative strength comparison.

5. The US dollar has remained strong and it's inverse correlation should provide a headwind to equities. The EUR/USD has rejected at a key bear trendline & remains capped below the key 10-week MA.

03/31 - GOLD probes triangular resistance

Gold rebounded off the resilient RSI base last week, highlighting a multi-month triangular consolidation formation. Today's test and subsequent failure of breaking above trendline resistance was aided by 4-hourly bearish MACD divergence. Coincidently, Eurogold has formed a smaller, but similar-type consolidation triange. As the US Dollar enters April, one of the worst month's seasonally, there is a strong probability that Gold could breakout to the upside. Moreover, other commodities (such as Crude oil) also hint of a breakout of recent ranges. Gold's first target would be the March 17th peak at 1133, also near a 50% retracement level. If, however, the yellow metal fails to break triangular resistance, then formation support at 1096 would be initially targeted.

03/26 - GOLD buoyed by RSI base & t-line support

200-day moving average MOVING faster than equity indices

03/24 - Fifth wave targets for DXY & EUR/USD

Both the DXY (US Dollar Index) and the EUR/USD have confirmed the fifth wave of an Elliot wave series that originates from November 2009. While 4-hour MACD divergence and the key 10-week MA initially stalled the greenback's weakness last week, it was the subsequent daily RSI wedge breakout that enabled dollar bulls to seize control.

One common method of determining a fifth wave target is to project the length of the first wave (or a proportion of that wave) within the series and project it from the start of the fifth wave. Beyond a cluster of DXY Fibonacci retracement level's near the 82 handle, the first fifth wave target lies at 1.3247 (a .618 proportion of the first wave). In both cases (DXY & EUR/USD), the equality target coincides with important levels at 83.714 & 1.2879, a combination of key Fibonacci retracement levels, Gann targets and swing pivots.